Mechanics Lien
Halt | July 24, 2021 | 0 Comments

The Ins and Outs of A Mechanic’s Lien: How Does It All Work?

The COVID pandemic caused a 40% increase in mechanic’s liens, but it’s essential to know that these liens have been around for a long time.

A mechanics lien is a legal tool that contractors use to collect the money that people owe them. If you are any type of contractor, you might want to learn more about these as you might need to file one.

Here is a guide to help you learn everything you need to know about mechanics liens.

A Mechanics Lien Is a Legal Tool

A Mechanic's Lien Is a Legal Tool

When a contractor performs work on a house, the homeowner must pay for the services. The contractor and homeowner agree on a price before the work is done, and the contractor expects them to pay.

In the same way, the homeowner expects the contractor to complete the work. If the homeowner doesn’t end up paying the contractor, the contractor can file a mechanic’s lien.

So, what is a mechanic’s lien? A lien is a claim against the home where the contractor completed the work. As a result, this means that the homeowner owes the money included in the lien.

If a mechanic performs work on a car, they can place a mechanic lien on a car if the vehicle owner fails to pay their bill.

The Results of a Lien

The Results of a Lien

A homeowner can live with a lien on their home for as long as they live in the house. A problem arises, though, when the homeowner decides to sell the house.

When the homeowners try to sell their home, the buyer will perform a title search. The title search will reveal this lien and its amount.

When the two parties close on the house, the seller must pay the lien in full in order to close. If the seller refuses, the buyer could pay it for them or call off the deal.

The lien is the responsibility of the seller because they own the house. The buyer, however, would not want to buy a house with a lien that the seller refuses to pay.

How to File a Mechanic’s Lien

If you are a contractor and need to file a mechanic’s lien, you might wonder how to file one. To file one, you will need to visit your local courthouse.

Filing a lien requires going to the courthouse as this is a legal event. The courthouse will walk you through the process of filing the claim.

You might be wondering, “who can file a mechanic’s lien?” Most states limit these liens to contractors, subcontractors, or anyone else that performs work on homes.

If the homeowner pays the debt, they will receive a mechanic’s lien release. This release releases the lien from the property.

Use a Mechanic’s Lien if Someone Owes You Money

Use a Mechanic's Lien if Someone Owes You Money

As a contractor, you might encounter times when homeowners refuse to pay their bills. If this happens, you can file a mechanic’s lien on the property.

While this won’t instantly give you the money they owe you, it will eventually help you get it.

If you enjoyed this article, check out the rest of our site for more helpful information.

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